Good morning! Here are the major stories you need to know about in markets on Monday.
Senate Passes A Very Big Deal. On Saturday, the US Senate passed a $US1.1 trillion spending bill, which means we won’t be experiencing another government shutdown anytime soon. “Not only was a government shutdown averted, not only did Congress show that it’s not totally dysfunctional, but Saturday night’s budget deal was one of those rare events that was memorable both for substance and politics,” Potomac Research Group’s Greg Valliere said. “The enduring memory from this budget battle is the Obama-Boehner alliance; whether it resurfaces next year on immigration or trade or taxes is the great wild card of 2015.”
Japan’s Abenomics Gets A Fresh Mandate. Japan Prime Minister Shinzo Abe’s party, the LDP, and its smaller coalition partner Komeito won 325 seats out of the 475 on offer. That’s exactly the same proportion it won in 2012, and it will most likely be taken as an endorsement of Abe’s economic policies, despite record low voter turnout.
OPEC Says Even $US40 Oil Won’t Force Its Hand. OPEC announced no cuts to oil production despite a supply-glut-driven crash in oil prices. “We are not going to change our minds because the prices went to $US60 or to $US40,” UAE energy minister Suhail Al-Mazrouei said. “The market will stabilise itself.”
Oil Bounced Back A Little. After a colossal sell-off last week, oil prices are making a small recovery. Brent crude is back to nearly $US63 per barrel, up nearly 2% on Sunday, when it dropped below $US61. WTI is back above $US58.50, up by about 1%, after falling just below $US57.
Early Signs Of A Slowdown In US Oil Fields Are Emerging. After leading the US economic recovery out of recession, some of the nation’s top oil states are showing early signs of a slowdown as a result of the plunge in crude prices.
In Houston, the first oil industry layoffs have been announced, with realtors there predicting a sharp decline, up to 12%, in home sales next year.
PetSmart Is Getting Bought For $US8.7 Billion. The pet supply retailer PetSmart said Sunday it had agreed to sell itself to a private equity consortium led by BC Partners for $US8.7 billion in the largest leveraged buyout of the year.
Markets Are Up. US futures are rallying, with Dow futures up 121 points and S&P futures up 16 points. In Europe, Britain’s FTSE 100 is up 0.3%, France’s CAC 40 is up 0.4%, and Germany’s DAX is up 0.3%. Asia closed lower, with Japan’s Nikkei down 1.5% and Hong Kong’s Hang Seng down 0.9%.
US Industrial Data Coming. The Empire Manufacturing index will be published at 8:30 a.m. ET; economists estimated the index climbed to 12.0 in December from 10.1 in November. US figures for industrial production in November are out at 9:15 p.m. ET; analysts are expecting a 0.7% boost from October.
US Housing Data Coming. The NAHB housing market index will be published at 10 a.m. ET. Economists estimate this index of homebuilder sentiment climbed to 59 in December from 58 in November.
Barron’s Couldn’t Find One Bearish Strategist. In its latest print edition, Barron’s writes that of the 10 high-profile Wall Street strategists it surveyed, all 10 expected stocks to rise in 2015.